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Friday, June, 27, 2014 - 1:01:56 PM

Mountain, Stoney Creek will feel U.S. Steel impact if it leaves

By Kevin Werner, News Staff

Nearly 2,000 of U.S. Steel’s pensioners are living on the mountain concerned that they could be left with little to no benefits if the company decides to leave Canada by 2016.

“We are concerned,” said Ward 7 councillor Scott Duvall, chair of the city’s steel sub-committee. “At the end of 2015 this could all end.”

An unprecedented economic impact study, produced by city staff, and presented to the sub-committee at the June 27 meeting, revealed that of the 5,158 retired steelworkers from U.S. Steel, 1,934 live in wards 6, 7, and 8. Another 1,357 retirees live in Stoney Creek, or parts of east Hamilton in wards 5, 9 and 10.

If those retirees lose, in a worst case scenario as Steelworkers local union 1005 present Rolf Gerstenberger said would mean about 40 per cent of their pensions and benefits, the Stoney Creek and mountain areas could be hard hit economically.

“It’s not a surprise to me (the mountain) has a lot of retired steelworkers,” said Duvall, who is a former steelworker himself. “But I didn’t know (the numbers) were that high.”

The economic study had been requested by the steel sub-committee in March to better understand the financial hit the city would take if U.S. Steel closed its Burlington plant. If the company would leave the city right now, Hamilton would lose nearly $22 million in tax revenues and pension benefits, according to the study.

The Ontario Pension Benefits Guarantee Fund, governed by the Ontario Pension Benefits Act, would guarantee pension benefits of Ontario members under single-employer defined benefit plan up to $1,000 per month for members. The study showed the per capita annual pension for the Hamilton retirees is just over $16,200.

“It is not shocking to us,” said Gerstenberger, who attended the committee meeting. “If you lost 40 per cent (of your pension) you don’t need to have a study to show it’s not good.”

If those retirees lose any portion of their pension, the economic study revealed, they would suffer economic hardship, mental and physical difficulties, and have housing issues.

“The impact felt by retirees will also be felt by their communities,” stated the report.

“It’s about the pensions, but on an ongoing basis (the impact on) the higher taxes on households” that would happen if U.S. Steel leaves, said Duvall.

Politicians asked for the report to prepare the city for what could happen in 2016. On Dec. 31, 2015, the agreement between U.S. Steel and the federal government will expire, which has kept the American-based company in the country operating Canadian plants. The agreement will also see the end of a special pension funding deal with the province. The fear from union members is U.S. Steel will relocate its operations to the United States.

U.S. Steel purchased Stelco in August 2007 for $1.9 billion under an agreement to keep its employee and steel production at a required level. The company failed to do so, forcing the federal government to take the company to court. The legal issue was settled out of court between the government and company, producing what has been called a secret agreement that has yet to be made public.

U.S. Steel officials and federal government representatives have repeatedly ignored requests to talk about the pending deadline from sub-committee members.

U.S. Steel officials sent a letter to council earlier this year stating that speaking at the committee meeting is “not an appropriate venue in which to discuss matters relating to our internal business transformation issues.”

The economic study is expected to form a core piece of information Hamilton officials want to present to federal officials as the future of U.S. Steel and Hamilton nears.

“This is a good analysis of a closing of a business,” said Neil Everson, executive director of the city’s Economic Development department. “It’s not just a Hamilton issue, it’s a regional issue.”

The study, though, is not completed. Further work will be done to incorporate the city’s water revenues from U.S. Steel, the impact of the company’s non-union workers’ salaries, and update the study with the 2013 actuarial reports, expected to be available in July.

But the sub-committee couldn’t formally approve or pass any policy or do anything because it didn’t have quorum. Only chair Duvall, Mayor Bob Bratina and Ward 1 councillor Brian McHattie attended the meeting. Councillors Terry Whitehead, Sam Merulla and Bob Morrow were absent.

“It’s inexcusable we don’t have quorum,” said Bratina, who apologized to the Steelworkers union representatives who turned out for the morning meeting. “This is not right. We can’t give any direction. I’m not very happy. Someone could have waited another half-day to go on a long-weekend vacation.”

Duvall said later an emergency sub-committee meeting could be held during the summer to provide the necessary direction to staff to complete the report, expected in September. He also wants to meet with federal officials, accompanied by Bratina and City Manager Chris Murray to talk about the U.S. Steel situation and present the city’s report to them.